United Utilities has reported a rise in revenues and profits with the publication this morning of its financial results for the six months ended 30 September 2017.

 Revenue was up £23 million, at £876 million, while underlying operating profit rose £32 million, at £344 million. The profit rise reflects the £23 million increase in revenue and a £16 million decrease in total costs offset by a £7 million increase in depreciation.

Reported operating profit was up £38 million, at £342 million, impacted by the same movements as underlying operating profit as well as slightly reduced profit in the first half of last year due to one off costs associated with storms and the setting up of the company’s  Water Plus JV.

Profit before tax – underlying profit before tax was up £5 million, at £194 million.  The increase in underlying operating profit, alongside a £3 million increase in United Utilities’ share of joint venture profits, was largely offset by a £29 million increase in the underlying net finance expense.

Total net regulatory capital investment in the first half of the year, including £70 million of infrastructure renewals expenditure, was £394 million, in line with company plans. United Utilities said it remains on track to deliver a total of around £800 million of regulatory capex for the full year.

This includes the first £20 million of the additional £100 million of investment announced in May to improve resilience for customers, which was not originally included in the PR14 regulatory settlement.  The utility’s five-year regulatory capex programme is  around £3.6 billion in total,  including the additional investment in resilience.

The utility said it had delivered sector leading operational and environmental performance – in July, United Utilities achieved Industry Leading Company status for the second year as measured through the Environment Agency’s (EA) annual assessment. The firm was one of only two companies to retain this status. Performance against the Drinking Water Inspectorate’s (DWI) metrics continues to improve- United Utilities delivered its best ever performance for 2016. The utility described this as “particularly pleasing given the historical issues we have faced due to the legacy nature of our asset base.”

Exploiting innovation and its Systems Thinking approach is continuing to transform the way United Utilities is running business, and is on track to deliver £100 million of savings in its AMP6 business plan. The utility is progressively moving greater capability into its Integrated Control Centre,facilitating a more proactive and predictive approach to monitoring assets and networks. The central control is reducing the level of reactive work and improving performance and efficiency.

Commenting on the results, Steve Mogford, Chief Executive Officer, said:

“This has been a strong first half performance in which we have delivered further value for customers and shareholders.

“We continue to put customers first, achieving significant further improvements in customer satisfaction, and positioning us as a leader in our sector. This is a significant achievement in a region seeing some of the highest levels of deprivation in the country. Average bills are set to reduce in real terms over the ten year period to 2020 and we expect to double the number of customers we help through our award winning affordability schemes over AMP6.

“Our innovative Systems Thinking approach to running the business is delivering increasingly efficient and resilient services. By investing earlier than our original plans for this regulatory period we are accelerating the delivery of value to customers and shareholders, and positioning the business as sector leading as we approach the next regulatory cycle.

“As we turn our attention to the next price review for the period 2020 to 2025, we are engaging with customers across our region to understand their needs and preferences and to formulate plans that best satisfy those needs. Affordability will be key, balanced against resilience to climate change and population growth in our region.”